Opinion
CIVIL ACTION No. 02-2632-CM
September 21, 2003
MEMORANDUM AND ORDER
Plaintiff has sued defendants alleging causes of action under: 1) Section 610(d)(1) of the Clean Air Act; 42 U.S.C. § 7671i(d)(1); 2) Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); 3) Kan. Stat. Ann. § 50-634; and 4) negligence/negligence per se. Defendants Chad Brown, Robyn Markland, Pro Exotics, Inc., Pro Exotics Reptiles, Inc., and Matthew Smith claim that this court lacks personal jurisdiction over them. This matter comes before the court on defendants Chad Brown, Robyn Markland, Pro Exotics, Inc., and Pro Exotics Reptiles, Inc.'s Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 17) and defendant Matthew Smith's Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 19).
• Background
Plaintiff filed this action against seven businesses, with principal places of business in five separate states, for violations related to the alleged illegal sale, distribution, offer for sale or distribution, and advertisement of a product called Black Knight. Plaintiff is a resident of Putnam County, New York, where he owns and operates a business known as Pro Products. Defendants Brown and Markland operate Pro Exotics, Inc., and Pro Exotics Reptiles, Inc. (referred to collectively as "the Pro Exotics defendants"). Defendant Smith does business as Dominion Reptiles.
The Pro Exotics Defendants
The Pro Exotics defendants breed and offer for sale live reptiles and sell reptile supplies and books. The Pro Exotics defendants also operate an informational website for reptile hobbyists. Pro Exotics, Inc., is incorporated and has been doing business in Colorado since 1993. In 2002, the Pro Exotics defendants closed their retail store in Colorado and concentrated their efforts on receiving orders exclusively by phone. The Pro Exotics defendants have advertised their business on kingsnake.com, an Austin, Texas based website, and in a trade magazine, Reptiles Magazine, based in Chicago, Illinois.
As alleged in plaintiff's Complaint, the Pro Exotics defendants advertise and offer Black Knight for sale and distribution nationwide at its website, proexotics.com, as well as on various other websites. Plaintiff's Complaint also alleges that the Pro Exotics defendants accept or have accepted orders for Black Knight by telephone, at reptile shows in various states, and "likely, by e-mail." However, the Pro Exotics defendants do not, and will not, accept orders over the Internet. Rather, the Pro Exotics defendants assert that all orders are received only by phone in Colorado.
As attested in affidavits submitted by defendants Brown and Markland, the Pro Exotics defendants have never directly solicited business in Kansas, nor have they sold a single can of Black Knight in Kansas or to a Kansas resident. Plaintiff submits no evidence to controvert this fact. Moreover, the Pro Exotics defendants have never had an agent, employee, place of business, telephone listing, or bank account in Kansas. None of the Pro Exotics defendants has ever gone to Kansas to negotiate any contract, nor ever set foot, in Kansas for purposes of Pro Exotics, Inc. business. The Pro Exotic defendants have, however, purchased Black Knight from the Kansas manufacturer, defendant Airosol Company, Inc. (Airosol).
Defendant Smith
Defendant Smith breeds and offers for sale live reptiles and sells reptile supplies. Additionally, defendant Smith operated an informational website for reptile hobbyists from 1998 until October 2002. Defendant Smith always has operated his reptile business from his home in Orange, Virginia. From time to time, defendant Smith attends reptile shows and has offered for sale live reptiles and reptile supplies as a vendor. To date, defendant Smith has participated in reptile shows in the States of Maryland, North Carolina, Illinois, Virginia, and Pennsylvania. Defendant Smith has advertised his business on his former website and on kingsnake.com. Defendant Smith has not advertised his business in any other media. Defendant Smith has never advertised for sale Black Knight in any media.
Like the Pro Exotics defendants, plaintiff's Complaint also alleges that defendant Smith accepts or has accepted orders for Black Knight by telephone, at reptile shows in various states, and "likely, by e-mail." Defendant Smith attests that he receives the majority of his orders in person at reptile shows, but receives an occasional order by phone or email at his residence in Virginia. However, defendant Smith does not accept orders over the Internet.
Defendant Smith also attests that he has never directly solicited business in Kansas, nor has he sold a single can of Black Knight in Kansas or to a Kansas resident. Plaintiff puts forth no evidence in contravention to this fact. Additionally, defendant Smith has never had an agent, employee, place of business, telephone listing, or bank account in Kansas, nor does he have any affiliates doing business in Kansas. Defendant Smith has never gone to Kansas to negotiate any contract, nor ever set foot, in Kansas for the purpose of his reptile business or any other business. However, similar to the Pro Exotics defendants, defendant Smith has purchased Black Knight from the Kansas manufacturer, defendant Airosol.
• Standard
A plaintiff opposing a motion to dismiss for lack of personal jurisdiction bears the burden of establishing that the exercise of personal jurisdiction over the defendant is proper. Kuenzle v. HTM Sport-Und Freizeitgerate AG, 102 F.3d 453, 456 (10th Cir. 1996). If the motion to dismiss is submitted prior to trial on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing to avoid dismissal for lack of personal jurisdiction. Id. Although the plaintiff will be required to prove the factual basis for jurisdiction by a preponderance of the evidence at trial, on a pre-trial motion to dismiss, all factual disputes are resolved in favor of the plaintiff. Id. If the plaintiff makes the required prima facie showing that personal jurisdiction exists, "a defendant must present a compelling case demonstrating `that the presence of some other considerations would render jurisdiction unreasonable.'" OMI Holdings, Inc. v. Royal Ins., 149 F.3d 1086, 1091 (10th Cir. 1998) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)).
In the instant case, the court must determine that the exercise of jurisdiction comports with due process and that an applicable statute potentially confers jurisdiction by authorizing service of process. Peay v. Bellsouth Med. Assistance Plan, 205 F.3d 1206, 1209 (10th Cir. 2000). The Kansas long-arm statute is construed liberally to allow jurisdiction to the full extent permitted by due process; therefore, the court proceeds directly to the constitutional analysis. Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1305 (10th Cir. 1994).
Under the due process analysis, the "constitutional touchstone" is "whether the defendant purposely established `minimum contacts' in the forum state." Burger King, 471 U.S. at 474 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). There must be some act by which the nonresident party purposefully avails itself of the privilege of conducting activities in the forum state. Hanson v. Denckla, 357 U.S. 235, 253 (1958). The purposeful availment requirement ensures that a defendant will not be sued in a foreign jurisdiction solely as a result of the unilateral activity of another party. Burger King, 471 U.S. at 475.
Consistent with due process, specific jurisdiction may be conferred over a nonresident defendant where the court's exercise of jurisdiction directly arises from a defendant's forum related activities. To determine whether specific jurisdiction is appropriate, the court must first decide whether the defendant has such minimum contacts within the forum state "that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1979). Second, the court must consider whether the exercise of personal jurisdiction offends "traditional notions of fair play and substantial justice." Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113 (1987). This inquiry requires a determination of whether a district court's exercise of personal jurisdiction over a defendant with minimum contacts is "reasonable" in light of the circumstances surrounding the case. Id.
• Discussion
Minimum Contacts
Plaintiff argues that defendants have engaged in minimum contacts with the State of Kansas such that the exercise of personal jurisdiction is constitutional. In support, plaintiff contends that defendants have offered Black Knight for sale and distribution in Kansas and that defendants likely sold and distributed Black Knight to Kansas residents. Plaintiff also asserts that minimum contacts are satisfied by defendant's purchase of Black Knight from Airosol and by virtue of the fact that defendants contracted with Airosol for those purchases.
Offer For Sale
The court first addresses plaintiff's contention that defendants likely have sold and distributed Black Knight to Kansas residents. As set forth above, defendants have submitted sworn affidavits that neither of them has ever sold or distributed a single can of Black Knight in Kansas or to a Kansas resident. Plaintiff has come forward with no evidence to the contrary, notwithstanding that the court granted plaintiff additional time to conduct discovery on this issue. Thus, the court will not consider plaintiff's allegation that defendants likely have sold and distributed Black Knight to Kansas residents in conducting its minimum contacts analysis.
The court next turns to whether defendants' offer of Black Knight for sale and distribution in Kansas satisfies the minimum contacts test. First, the court turns to whether defendant Smith ever did, in fact, offer Black Knight for sale in Kansas. Defendant Smith asserts in his affidavit that he has never advertised in any media the Black Knight product for sale. Plaintiff offers no evidence to contradict this assertion. Instead, plaintiff's evidence regarding the offering of Black Knight for sale and distribution via any media concerns only the Pro Exotics defendants, as set forth more fully below. Defendant Smith's sale of Black Knight appears to have occurred only through reptile shows held in states other than Kansas. Thus, the court concludes that defendant Smith has not offered Black Knight for sale in Kansas.
With regard to the Pro Exotics defendants, plaintiff submits as evidence the Internet websites on which the Pro Exotics defendants advertise. Specifically, on proexotics.com, the Pro Exotics defendants advertise the sale of Black Knight. Also, on kingsnake.com, the Pro Exotics defendants offer for sale Black Knight, stating, "We ship across the country! . . . Get your can of Black Knight for $20 by calling us at [phone number] today!" The court examines whether the Pro Exotics defendants' website advertisements constitute minimum contacts in Kansas.
The Tenth Circuit has adopted the analysis set forth in Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D.Pa. 1997). See Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1297 (10th Cir. 1999). At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the internet, personal jurisdiction is proper. At the opposite end are situations where a defendant has simply posted information on an Internet web site which is accessible to users in foreign jurisdictions. A passive web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction. The middle ground is occupied by interactive websites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the website.
In this case, neither website falls under the "active" category, in that the websites do not allow for the making of contracts over the Internet for the purchase of Black Knight. Rather, the websites merely offer product information and a telephone number at which customers may place an order. However, the proexotics.com website provides access to email communication with the Pro Exotic defendants, and kingsnake.com provides a direct link to proexotics.com. As such, the court considers the websites to be minimally interactive and, therefore, falling within the middle ground.
The court therefore looks to the level of interactivity and commercial nature of the exchange of information. There is no evidence of any activity with residents of Kansas. It is uncontroverted that no Kansas resident has purchased Black Knight from the Pro Exotic defendants by placing a telephone order. Moreover, no evidence exists that a single Kansas resident has visited the websites. Thus, there has been little, if any, activity with Kansas residents. See iAccess v. WEBcard Techs., Inc., 182 F. Supp.2d 1183 (D.Utah 2002) (holding that a minimally interactive website with only a single sale to a Utah resident was not sufficient to establish personal jurisdiction where defendant had consummated no transactions, made no deliberate or repeated contacts, and had no "hits" on its website from Utah users).
With respect to the commercial nature of the exchange, the court concludes that, even if the Pro Exotics defendants' product information constitutes an "offer to sell," in the absence of evidence that Kansas residents actually accessed the websites, the court declines to find minimum contacts. The court also finds significant the absence of any evidence that the Pro Exotics defendants targeted Kansas residents. See Rainy Day Books v. Rainy Day Books Café, L.L.C., 186 F. Supp.2d 1158, 1165 (D.Kan. 2002) ("[T]he focus of the inquiry is on Defendant's actions in setting up and maintaining a commercial website, which targeted Kansas residents by its alleged use of Plaintiff's service marks."). For example, in Systems Designs, Inc. v. New Customware Co., Inc., 248 F. Supp.2d 1093, 1102 (D.Utah 2003), the court concluded that the defendant had targeted Utah residents by listing its large clients on its website-all companies with substantial connections to Utah. The court stated, "By listing them as clients, [defendant] was suggesting to Utah companies the desirability of doing business with it." Id. In the case at hand, there is no such evidence. Accordingly, the court finds that the Pro Exotics defendant's websites do not constitute minimum contacts with Kansas.
Plaintiff also contends that the Pro Exotics defendants' attendance and sale of Black Knight at reptile shows in states other than Kansas confers personal jurisdiction. Plaintiff reasons that, because the Pro Exotics defendants have engaged in these activities in Illinois and other states distant from its Colorado headquarters, the Pro Exotics defendants "likely" have distributed Black Knight in and through the State of Kansas. The court finds plaintiff's contention unavailing. As with defendant Smith, the court concludes that, absent any evidence of a connection with Kansas, the attendance and sale of Black Knight at reptile shows in states other than Kansas do not constitute minimum contacts.
Purchase from Airosol
Both the Pro Exotics defendants and defendant Smith have purchased Black Knight from the manufacturer, defendant Airosol, a Kansas company. Plaintiff argues that this purchase from Kansas confers personal jurisdiction. Plaintiff also asserts that these purchases constitute an express or implied contract, by mail or otherwise, with a Kansas resident and that, as such, minimum contacts with Kansas exists. Defendants, on the other hand, contend that their purchases from defendant Airosol are not connected to plaintiff's causes of action against them. In support, defendants point out that plaintiff's claims against them arise out of their alleged sale of Black Knight, not their purchase of Black Knight, and that, as a result, the connections between defendants and defendant Airosol are too remote from plaintiff's cause of action to justify exercising jurisdiction.
Neither the Supreme Court nor the Tenth Circuit have yet to clarify whether contacts that are related to the cause of action, but are not so closely related that the cause of action arises out of them, are a sufficient basis to exercise specific jurisdiction. However, Judge Lungstrum pointed out in SBKC Serv. Corp. v. 1111 Prospect Partners, L.P., that a "but for" test, which requires a causal connection between the defendant's forum activities and the plaintiff's injuries, appears to have been applied in at least three prior District of Kansas decisions. 969 F. Supp. 1254, 1259 (D.Kan. 1997), vacated in part on other grounds, 153 F.3d 728 (10th Cir. 1998) (citing Source Assocs. Inc. v. Suncast Group, 709 F. Supp. 1023, 1025 (D.Kan. 1989); US Sprint Communications Co. v. Boran, 716 F. Supp. 505, 510 (D.Kan. 1988); Grimandi v. Beech Aircraft Corp., 512 F. Supp. 764, 767 (D.Kan. 1981)). Consequently, the court determines that, if a claim is made possible by or lies in the wake of the transaction of business in Kansas, minimum contacts are present.
Here, "but for" defendants' acquisition of Black Knight from Airosol, defendants would not have allegedly sold Black Knight to residents in states other than Kansas, and plaintiff would not have suffered his alleged injury. Accordingly, the court finds that the purchase of Black Knight from Airosol constitutes minimum contacts.
Reasonableness
If a plaintiff makes a prima facie showing that minimum contacts exist, the defendants can defeat the exercise of personal jurisdiction by demonstrating that it is incompatible with "traditional notions of fair play and substantial justice" — a reasonableness inquiry conducted in light of the circumstances surrounding the case. OMI Holdings, Inc., 149 F.3d at 1090. Factors relevant to the inquiry include: (1) the burden on the defendant, (2) the forum state's interest in resolving the dispute, (3) the plaintiff's interest in receiving convenient and effective relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several states in furthering fundamental substantive social policies. Id. at 1095, (citing Asahi Metal Indus. Co., 480 U.S. at 113).
An examination of these factors shows that the exercise of jurisdiction in this case is not constitutionally unreasonable. Defendants' burden in litigating in this forum is a factor in the reasonableness assessment. Having said that, the court is mindful that, because the Pro Exotics defendants reside in Colorado and defendant Smith resides in Virginia, litigating this case in Kansas would be inconvenient. However, unless the inconvenience is so great as to constitute a deprivation of due process, this burden would not overcome justification for the exercise of jurisdiction. Defendants have failed to make such a showing on inconvenience.
In addition, this court has a strong interest in adjudicating disputes that involve the sale and distribution of an allegedly unlawful product manufactured in and originally distributed from Kansas. The court notes that plaintiff is a New York resident. Thus, the court cannot say whether litigating this action in Kansas would be more convenient for plaintiff. However, litigating this case in one distant forum, rather than several should he be required to re-file in Colorado and Virginia, would pose an inconvenience to plaintiff. Moreover, by litigating plaintiff's claims in this one action, the interstate judicial system's interest in obtaining the most efficient resolution of controversies would be furthered, and the risk of receiving inconsistent judgments would be minimized. Finally, the shared interest of the several states in furthering fundamental substantive social policies favors the exercise of personal jurisdiction since plaintiff's claims may raise significant environmental and trade restriction policy issues, which the court believes are best decided in the forum where the product at issue originated. Accordingly, the court concludes that its exercise of specific personal jurisdiction over defendants comports with the requirements of due process.
IT IS THEREFORE ORDERED that defendants Chad Brown, Robyn Markland, Pro Exotics, Inc., and Pro Exotics Reptiles, Inc.'s Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 17) and defendant Matthew Smith's Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 19) are denied.